Horizon Blue Cross Blue Shield of New Jersey's OMNIA line of discount health plans is no stranger to controversy.
Horizon has touted the line as potentially transformative, designed to offer consumers significant savings if they agree to seek care from hospitals chosen for the network that agreed to lower reimbursement rates. However, the line, along with its payment model, has sparked multiple lawsuits, a dozen bills proposed by legislators and an expensive public relations war, according to a Wall Street Journal report.
Most recently, a package of bills that would require stricter state regulation of plans like OMNIA was passed by a New Jersey Assembly committee in April, the publication notes.
"I've worked in healthcare policy in New Jersey for roughly 20 years, and I can't recall another issue that has prompted so much passionate debate among providers," Betsy Ryan, president of the New Jersey Hospital Association, told The Wall Street Journal.
Horizon's OMNIA line is based on a tiered model. Hospitals in the network have been assigned to either a Tier 1 or Tier 2 category. Patients may visit the facility of their choice, but pay less out-of-pocket costs at Tier 1 hospitals than at Tier 2 hospitals.
Opponents of OMNIA argue the plan was designed to encourage customers to go to large hospital networks above independent facilities, according to the report.
Linda Schwimmer, president of the nonprofit New Jersey Health Care Quality Institute, told The Wall Street Journal that Horizon's decision to offer a tiered plan has caused uproar in part because of the company's market dominance. State statistics show Horizon has nearly 3.9 million members, more than half of New Jersey's commercial health insurance market.
In 2015, Horizon negotiated price and quality benchmarks with Tier 1 hospitals, with the prospect of additional volume of patients going to their facilities, according to the report. However, both sides contend the same discussions weren't heald with Tier 2 hospitals.
“This is all done by Horizon on its own terms in a secret way,” Steven Goldman, a lawyer representing the 17 Tier 2 hospitals and a former state banking commissioner, told The Wall Street Journal.
Horizon executives disagree with that notion, and point to a list of publicly released metrics that were used to evaluate providers for OMNIA. However, Horizon has not disclosed an internal report that contains the scoring of providers, saying it is proprietary, according to the report. Tier 2 hospitals filed a lawsuit to publicize the report, and judges in two counties have ruled it should be disclosed, according to The Wall Street Journal. The case is being litigated on appeal.
The company told The Wall Street Journal it does support more transparency for tiered networks statewide.
So far this year, 234,235 Horizon members have chosen OMNIA, including 41,248 enrollees who didn't previously have insurance, according to the report, which cites company figures.
Robert Marino, president and CEO of Horizon, told The Wall Street Journal some Tier 2 hospitals may be invited to join Tier 1 at a future date depending on how the market develops.